How Much Taxes Do U Pay On Casino Winnings

 

Gambling Winnings or Losses TB-20(R) – August 2, 2016 Tax: Gross Income Tax Under the provisions of N.J.S.A. 54A:5.1(g), all gambling winnings, whether they are the result of legalized gambling (casino, racetrack, etc.) or illegal gambling, are subject to the New Jersey Gross Income Tax. W2-Gs are not requirefor winnings from table games such as blackjack, craps, pai gow, baccarat and roulette, regardless of the amount. The withholding rate for non-resident US is 30% and the tax rate for non-resident US is also 30%.

Disclaimer: OnlineUnitedStatesCasinos does not provide tax, legal or accounting advice. We encourage those who are making important decisions on their online gambling taxes to consult with their own certified tax professional before filing with the IRS.

Are online gambling winnings taxable? Yes, whether you gamble at land-based or online casinos, the money you earn is subject to federal income tax. Known as gambling income, the money you earn from wagers and bets as well as lotteries, sweepstakes, etc. all must be taxed.

In some cases, you will be provided with tax forms that must be turned in to the federal government. The full amount of the gambling income minus the cost of the winning bet will be included on this form. Whether you receive this form or not, it’s important to know your responsibilities when it comes to filing income taxes.

The process of handling gambling taxes is not difficult if you know what to do. With this in mind, the OUSC team created this quicktax guide to help US players report their online gambling income.

Do US Players Have To Pay Taxes For Online Gambling?

So, if you enjoy online gambling at sites like BetOnline or Bovada Casino, do you have to pay taxes? When you choose to gamble online, the money you earn is still taxable. Even if the site is located in another country, you still have to pay taxes.

Online gambling is unregulated in most regions of the US, but taxes must still be paid. Just because you do not receive tax forms, does not mean that your winnings are not taxed.

To the IRS, it does not matter where the money is either. If you have funds in your online casino account, even if it’s an offshore site, it’s taxable. When dealing with online gambling earnings, it’s important to review this information with an accountant to ensure you pay the right amount of taxes owed.

Below you will find a list of gambling activities that the International Revenue Service considers taxable:

  • Prizes
  • Private Party Games
  • Tournaments
  • Scratch Off Tickets
  • Other

How Much Taxes Do I Pay On Casino Winnings

How Do You Report Gambling Winnings?

The way you report your gambling activities will be dependent on how you win. If you receive a Form W-2G, then this is what you will turn in when filing taxes. Taxes must be filed before April 15th or you must ask for an extension. You will turn this form in as you do your other tax forms for employment to an accountant or tax filing company.

If you do not receive the W-2G form, then you will need to fill out a Form 1040, adding the winnings to Line 21 of the form. The full amount of gambling winnings will be placed on this line.

When filling out the 1040, you will need to configure your losses as well. The expense you had for bets, wagers, etc. will need to be deducted as an itemized deduction. This is done on the “Other Miscellaneous Deductions” line of Schedule A form. This will help to lower the tax amount paid on your total gambling income.

What Types of Records Do You Need?

The information you record while enjoying online gambling can be used during the filing process. It’s important to maintain a log or diary of all your losses and winnings. Keep in mind the following information:

  • Dates: You will need to record the date and type of activity completed, including wagers and winnings.
  • Location: List the name and location of the gambling facility. In the case of online gambling, this would be the website, such as MyBookie or Café Casino.
  • Checks: If you are sent any checks in the mail from winnings, be sure to keep the check stub.
  • Paperwork: For some players, winnings will be sent via mail and any paperwork should be kept and used during filing as needed.

Don’t Forget To Pay Your Online Gambling Taxes

When you gamble online, it is important to enjoy yourself, but also remember to file your winnings! The IRS takes gambling money very seriously and you want to be sure that you pay your taxes accordingly. If you need any additional information, be sure to visit the official website of the IRS to find all the previously mentioned forms you will need fo file your taxes.

How Much Tax Do You Pay On Casino Winnings In Las Vegas

The glittering lights and ringing bells of the casino. The dream of winning the lottery. Gambling can be a lot of fun for most people, and when your number finally comes up -- well, isn't that the whole point?

Of course, we all want to go home big winners with a wad of cash in our pockets. However, once you win, the IRS does, too. In fact, they expect and require you to report your gambling winnings. Gambling winnings (which the IRS refers to as 'income') can include:

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  • Lotteries
  • Raffles
  • Horse/dog races
  • Noncash prizes -- like cars, trips or houses

What you need to report depends on how much you win, what type of gambling you were doing, and the ratio of your winnings to your wager.

How Much Taxes Do You Pay On Casino Winnings

Typically, you'll receive paperwork from the casino (or other source of your payout) to complete if you win a certain amount. You must provide your Social Security number and fill out IRS Form W-2G. This form is called 'Certain Gambling Winnings,' and allows you to report your winnings as income to Uncle Sam. You'll receive that paperwork if you win:

  • $600 or more from the state lottery, horse or dog races, jai alai or other wagering (but only if the winnings are 300 times the original wager)
  • $1,200 or more at a slot machine or bingo
  • $1,500 or more on keno (minus the amount you spent on tickets for the winning game)
  • $5,000 or more in poker tournaments

Typically in a winner situation of $5,000 or more (no matter what the game), the payee will not only require you to fill out the above-mentioned forms, but will also take 25 percent of your winnings up front to give directly to Uncle Sam [source: Bell]. If you refuse to fill out the form or provide your Social Security number, most establishments will take 28 percent of your winnings, in accordance with federal law [source: IRS].

You don't have to fill out the W2-G form for winnings on table games, including craps, blackjack, pai gow, baccarat and roulette. However, you still have to report those winnings when you file your regular income tax in April. On form 1040, on the 'Other Income' line (line 21) you report any other winnings, like prize or award money.

Here's where things can get a little more complicated. Just as you report your winnings to the IRS, you can also report your losses. On line 28 of form 1040, 'Other Miscellaneous Deductions,' if you have any gambling losses, note them there. However, your losses can't exceed your winnings. It's also important to note that you'll only want to do this if you're already itemizing your deductions and will end up deducting more than the standard [source: IRS]

All of this information illustrates why it's crucial to keep detailed records of your gambling -- both wins and losses -- especially if you do it often . Signing up for a player's card at a casino is a great idea, because the casino keeps an electronic record for you to easily access [source: Taxpertise].

The takeaway here is that the IRS treats any gambling or contest winnings as income. You should report all of it, even if the casino or other payee doesn't hand you a tax form to fill out. State tax laws apply too so be sure to check with your state's department of revenue to determine your liability [source: Ritchie].

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How Much Taxes Do You Pay On Casino Winnings

Sources

How Much Taxes Do You Have To Pay On Casino Winnings

How
  • Bell, Kay. 'Reporting gambling winnings.' Bankrate. Feb. 3, 2014. (Sept. 22, 2014) http://www.bankrate.com/finance/money-guides/reporting-gambling-winnings.aspx
  • IRS. 'Gambling Winnings Are Always Taxable Income.' Aug. 19, 2014. (Sept. 22, 2014) http://www.irs.gov/uac/Gambling-Winnings-Are-Always-Taxable-Income
  • IRS. 'Instructions for Forms W-2G and 5754.' 2014. (Sept. 22, 2014) http://www.irs.gov/pub/irs-pdf/iw2g.pdf
  • Ritchie, Josh. 'How Are Gambling Winnings Taxed?' TurboTax Blog. March 30, 2012. (Sept. 22, 2014) http://blog.turbotax.intuit.com/2012/03/30/how-are-gambling-winnings-taxed/
  • Roche, Yolanda S., E.A. and Roche, Roger C., E.A. 'The Taxman Cometh.' Las Vegas Review-Journal. 2014. (Sept. 22, 2014) http://www.reviewjournal.com/business/casinos-gaming/features/taxlaws.html
  • Taxpertise. 'Uncle Sam Wants His Cut on Your Gambling Winnings.' FOXBusiness. Sept. 20, 2013. (Oct. 30, 2014) http://www.foxbusiness.com/personal-finance/2013/09/19/uncle-sam-wants-his-cut-on-your-gambling-winnings/